Vice President Kamala Harris' recent outreach to the cryptocurrency community has ignited debate among industry experts.
However, Grant Cardone, the CEO of Cardone Capital and a speaker at Benzinga's Future of Digital Assets event, is not convinced.
Cardone views Harris’ actions as mere political maneuvering, claiming, "Harris has had no shift toward the crypto industry."
He suggests that her recent tactics are part of a broader strategy to secure votes without offering genuine support to the crypto space.
Trump vs. Harris on Crypto
In contrast, Cardone believes former President Donald Trump has a better grasp of the digital asset landscape.
When asked about Harris’ potential impact on the industry, he didn't mince words: "If she is elected, forget crypto."
He praised Trump for allegedly understanding the vulnerability of the U.S. dollar to overprinting and for the possibility of adopting crypto to back the dollar.
While Cardone supports Trump's stance, critics point out that the national debt soared to $22 trillion during Trump's administration, with $8 trillion added in just four years.
Cardone’s Criticism of Traditional Retirement Plans
Cardone, who has built his reputation on unconventional takes in the finance world, doesn’t just focus on crypto.
He has been equally vocal about his opposition to traditional retirement savings vehicles like 401(k)s and IRAs.
He calls them ineffective for building real wealth, labeling them “traps that prevent people from ever having enough.”
Cardone argues that the tax implications of 401(k)s and potential rises in tax rates could end up costing investors more in the long run.
“I believe that Wall Street and the IRS got together and said, ‘Hey, we want to capture this money for long periods of time and we’ll benefit you by hammering these people [on taxes],'” he says, criticizing the system as fundamentally flawed.
The Impact of Inflation on Retirement Savings
Cardone also highlights the negative impact of inflation on these retirement savings plans.
He believes that maintaining liquidity and being able to invest in more immediate opportunities is essential for building wealth.
Instead of making small, consistent contributions to retirement accounts, Cardone advocates for a more aggressive approach to wealth accumulation, urging people to substantially increase their earnings and put their money into “secured, sacred (untouchable) accounts.”
He stresses not to touch these accounts, even for emergencies, aiming to build a more substantial financial safety net.
Also Read: In 2022, Maxine Waters Wanted To Subpoena Sam Bankman Fried—Now She Thinks Crypto Is ‘Inevitable’
The Popularity of 401(k) Plans
Despite his criticism, 401(k) plans remain popular, with Americans having $7.4 trillion invested as of the fourth quarter of 2023.
On average, employees contribute 7.4% of their pay, with employers adding an extra 4.5%.
Critics argue that Cardone’s dismissal of 401(k)s overlooks their key benefits, such as employer matching contributions and significant tax advantages, which can be instrumental for those who may not have the expertise or risk tolerance for high-stakes investments like real estate.
Cardone’s Emphasis on Financial Education
Cardone’s financial philosophy pivots toward a greater emphasis on financial education.
Recently, he criticized Harris again, this time for her proposal to create 25 million new businesses in her first year if elected.
Cardone highlighted that the U.S. already has about 32 million small businesses, with 67% just breaking even or losing money.
His argument is straightforward: rather than pushing for more businesses, the focus should be on improving financial literacy.
"What people really need is financial education," Cardone emphasized, taking a jab at Harris' claim of once working at McDonald's, suggesting that financial education should be accessible to all, including those in entry-level jobs.
He contends that the lack of financial literacy is a significant reason why so many new entrepreneurs fail.
Starting a business requires more than just an idea; it involves a deep understanding of finances, markets, and long-term planning.
Cardone argues that most Americans are ill-equipped to manage their money effectively, which is why they struggle to maintain profitability in their ventures.
"The more people learn about budgeting, saving, and investing, the more they'll succeed, both in the workplace and personal life," he asserts.
Financial literacy experts echo Cardone’s concerns. Suze Orman, a well-known personal finance expert, points out that “95% of Americans lack financial literacy.”
She emphasizes that many people don't understand the basics of retirement planning, budgeting, or investing, which significantly hinders their ability to build wealth.
A study supports this, revealing that individuals with low financial literacy are 3.5 times more likely to be financially fragile and four times more likely to lack even a month of emergency savings.
While Cardone's views may be divisive, his focus on financial education highlights an essential issue. Many believe that financial literacy could help address some of the economic challenges faced by both individuals and the broader economy. However, others argue that starting more businesses can also benefit the economy by creating jobs, fostering competition, and introducing innovation.
These topics, among others, will be explored at Benzinga's Future of Digital Assets event on November 19, where industry experts, investors, and policymakers will delve into the complexities of the financial landscape and discuss the role of digital assets in shaping the future.
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Some elements of this story were previously reported by Benzinga and it has been updated.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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